Rent Increases of 6.94% Expected in 2024: What You Need to Know

Prime Properties Madeira Real Estate Agency

Inflation for the last 12 months, excluding housing, has surged to 6.94% as of August. This critical factor is set to determine the upcoming rent adjustments in 2024, and it's making waves in the real estate market. The National Institute of Statistics (INE) confirmed this data on September 12, 2023. What does this mean? Without government intervention, landlords can legally increase rents by a significant 6.94% starting in January 2024. However, there's a catch.

The government had previously imposed a 2% cap on rent increases this year in an effort to curb the rising cost of living and address the housing crisis. The current situation has prompted policymakers to reevaluate whether they should extend these measures into the next year. It's a hot topic with major implications for both renters and landlords.

To put this into perspective, let's do some simple math:

  • If you pay a monthly rent of 100 euros in 2023, you can expect it to rise to 106.94 euros in 2024.
  • For a 200 euro monthly rent in 2023, you'll be looking at 213.88 euros in 2024.
  • Those paying 500 euros a month in 2023 will see their rent increase to 534.70 euros in 2024.
  • And if you have a monthly rent of 1,000 euros in 2023, brace yourself for a 1,069.40 euro bill in 2024.

This projected increase is poised to be the most significant in 30 years, with the last time something similar happening dating back to 1993 when the adjustment coefficient reached 1.080 (equivalent to an 8% increase).

However, it's essential to note that landlords aren't obligated to hike rents, but if they choose to do so, they are limited to the 6.94% average inflation rate of the last 12 months.

The ball is now in the government's court as they weigh the pros and cons of implementing measures to mitigate this situation. In the coming days, we can expect an official announcement on whether they will continue to put the brakes on rent increases in 2024.

The Minister of Housing, Marina Gonçalves, had this to say: "(...) We now need to evaluate the various proposals, the various possibilities we have on the table. Then we can decide whether to move forward with any measures or not. We have this period now. It will be an assessment, as soon as possible, to provide some stability to the rental market starting in January. But we still have this time frame until the end of the year to make the decision because it will only have an impact on the rental market in 2024."

Stay tuned for updates as we follow this developing story closely. It's a crucial issue that could significantly affect both renters and landlords alike in the coming year.


Adaptation: Idealista 

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